How Do Design Professional Liens Work, Who Can Record Them, And Under What Circumstances?
A brief introduction to design professional liens.
Who Is A Design Professional?A design professional is a licensed architect, licensed landscape architect, registered as a professional engineer, or licensed as a land surveyor, who provides services pursuant to a written contract to a landowner for the design, engineering, or planning of a work of improvement. Civil Code Sections 8014, 8300.
What Does A Design Professional's Lien Do?A lien provides the lienholder a security interest in the property; allowing the lien holder to foreclose on the property to satisfy the lien. A design professional has, from the date of recording of a design professional lien against property, a lien on the property despite the absence of the start of any construction, if the landowner who contracted for the services is also the owner of the property at the time of the recording of the lien. Civil Code Section 8302(a). The amount of the lien is the amount of the fee in the contract, or the reasonable value of the design professional's work, whichever is less. Civil Code Section 8302(b).
Under What Circumstances Can A Design Professional Record A Design Professional's Lien?A design professional cannot record a lien unless a building permit or other government approval is obtained in connection with the design professional's work. Civil Code Section 8302(c). In order to be entitled to record a lien, all of the following must be true:
- The work of improvement (i.e., the real property development) for which the design professional's services were rendered has NOT begun.
The landowner has not made payment as required by the contract, or the landowner refuses to make payment.
Not less than 10 days before recording the lien, the design professional gives the landowner notice making a demand for payment and stating a default has occurred under the contract and the amount of the default (in other words, saying how much the landowner owes the design professional).
Finally, the design professional records a lien with the following information: (A) name of design professional, (B) amount of the claim, (C) current owner of the property, (D) legal description of the property, (E) and an identification of the building permit or government approval obtained in connection with the design professional's work.
Civil Code Section 8304.
When Does The Design Professional's Lien Expire?A deign professional's lien expires and is no longer a lien on the property at the earliest of either (1) commencement of construction on the property, or (2) 90 days pass without the design professional filing a lawsuit to enforce its lien against the property (foreclose on the lien).
A Few Other NotesA design professional can also record a regular mechanic's lien under Civil Code Section 8400 (after construction has started). A design professional, under certain circumstances, can convert an existing design professional's lien into a mechanic's lien. See Civil Code Section 8319.